Citigroup to prop up 7 ailing funds

Citigroup Inc. said Thursday it would bail out its seven specialized investment funds known as structured investment vehicles, bringing $49 billion in assets onto its balance sheet in the biggest move yet by a bank to rescue the troubled funds.

Citigroup, the largest manager of such investment funds, followed banking titans HSBC Holdings and WestLB in deciding to save the funds and avert forced sales of the securities they own.

But by taking on the SIV assets, Citigroup will weaken its own finances, reducing the "capital ratio" that regulators monitor to gauge the bank's ability to withstand losses on bad loans.

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- Posted: 2007-12-14 08:23:20

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